Does Corporate Social Responsibility Affect the Performance of Firms?

37 Pages Posted: 6 Aug 2012

See all articles by Nicola Comincioli

Nicola Comincioli

University of Brescia

Laura Poddi

University of Ferrara

Sergio Vergalli

University of Brescia - Department of Economics; Fondazione Eni Enrico Mattei (FEEM), Milan

Multiple version iconThere are 2 versions of this paper

Date Written: August 6, 2012

Abstract

Over the last two decades in OECD countries an increasing number of firms are obtaining certification as Socially Responsible (CSR is the acronym for Corporate Social Responsibility). Several studies (including Preston and O’Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) have sought to test whether there is a relation between Social Responsibility certification and firm performance. Our work builds a CSR index that intersects two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index), in order to overcome some problems related to the multiplicity of CSR definitions and certifications. By using this database in a panel framework, our work shows that some performance indicators are affected by a firm’s social responsible behavior and certifications. The main results seem to support the idea that CSR firms, which are more virtuous, have better long-run performance: even if they have initial costs due to the certification, they achieve higher sales volumes and profits, thanks to the reputation effect, a reduction in long-run costs and increased social responsible demand.

Keywords: corporate social responsibility, growth

JEL Classification: M14, C23, O10

Suggested Citation

Comincioli, Nicola and Poddi, Laura and Vergalli, Sergio, Does Corporate Social Responsibility Affect the Performance of Firms? (August 6, 2012). FEEM Working Paper No. 53.2012. Available at SSRN: https://ssrn.com/abstract=2124932 or http://dx.doi.org/10.2139/ssrn.2124932

Nicola Comincioli

University of Brescia ( email )

Piazza del Mercato, 15
25122 Brescia
Italy

Laura Poddi

University of Ferrara ( email )

Via del Gregorio 13
Ferrara, 44100
Italy

Sergio Vergalli (Contact Author)

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

Fondazione Eni Enrico Mattei (FEEM), Milan ( email )

Corso Magenta 63
20123 Milan
Italy

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